Sun Microsystems, boosted by its association with the Internet,
is expected to continue its profitability streak when it reports
third-quarter earnings later today.

The company is expected to report profits of 35 cents a share, according to
the consensus of analysts reported by First Call.

"They have certainly been doing well on servers in the key areas of the
market that are the most rapidly growing"--in other words, the Internet,
said Goldman Sachs analyst Laura Conigliaro. Sun computers are the hardware
most often identified with the Internet, she said.

Analysts also expect Sun to benefit from its partnership with America Online, which beefs up the company's
Web software presence and gives Sun a major new hardware customer.

Sun stock has been rising steadily since October, reaching an all-time high
of $72.5 per share last week. Also last week, the company split its
stock two-for-one.

The stock price of Sun's major competitors, IBM and Hewlett-Packard, also has risen--but not at
the pace set by Sun.

Conigliaro had set a goal of 20 percent revenue growth but said the company
may exceed that. "We are thinking they had a strong quarter and can do a
little better than 20 percent revenue growth," she said.

In the third quarter a year ago, Sun had revenues of $2.4 billion. Last
quarter, Sun had revenues of $2.8 billion.

Sun got its start making workstations that were
popular with programmers and researchers, but the company then pushed into
servers--the computers that make networking possible. Sun's machines are
now vastly more powerful, but have stayed true to the company's Unix roots.

Though Sun doesn't approach IBM in the reach and comprehensiveness of the
consulting services it sells, the company is no longer ridiculed,
Conigliaro said. That's because Sun has genuinely improved some of its
services, but also because it has expertise in some new areas such as
e-commerce.

The company also has been emphasizing software: focusing on its Solaris
operating system, server programs to handle tasks such as managing email or
creating customized Web pages, and its "write once, run anywhere" Java
technology.

Java took a step forward last year with the unveiling of Java 2, which
improved security and interface features of the system. Ironically, the
initial release was only for Windows--the operating system of Sun archrival
Microsoft--and it wasn't until
yesterday that Java 2 was available for Sun's own operating system.

Java also is an entree for Sun into the "embedded" market--electronic
equipment like cell phones, factory robots, or personal digital assistants
that have computing abilities but that usually hide the intricacies from
the user.

Sun is working on new versions of Java as well as Jini, which is special
software that allows Java-enabled devices to automatically connect together
over networks and use each others' services.